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For a moment last week, markets almost pined for the old days of cryptic, sporadic Alan Greenspan-style Fedspeak.

Greenspan's successor as Federal Reserve chairman, Ben Bernanke, has moved toward greater transparency and clearer, more frequent public communication. Perhaps too much so. A chorus of somewhat conflicting Fed voices and messages last week did more to confuse markets than edify them, putting investors on edge about what to expect from the central bank in the coming months as it decides how and when to dial back its $85 billion monthly bond-buying program.

Parsing what the Fed says, always a popular sport in financial markets, reached a new level of fussiness on Wednesday. Bernanke spoke before Congress that morning, as expected delivering a dovish, stay-the-course message, similar to what had been laid out in speeches by St. Louis Fed President James Bullard and New York Fed President William Dudley earlier in the week.

AROUND MID-MORNING, listeners homed in on a single Bernanke comment, made in response to a question about whether the Fed might start tapering off its quantitative-easing efforts before Labor Day. Bernanke left open the possibility that the central bank could conceivably begin to wind down the program within the period covered by the next few Fed policy-committee meetings.

Markets promptly tanked. Forget that Bernanke's comments were broadly consistent with what Dudley had said a day earlier, and with what the Fed had made explicit in its most recent policy statement early this month, when it reserved the right "to increase or reduce the pace of its [bond] purchases...as the outlook for the labor market or inflation changes." Markets wanted to be soothed anew. Bernanke gave them nine parts soothing with one part uncertainty. That was enough to disappoint.

Later that day, the release of the minutes of the Fed's most recent policy-committee meeting suggested increased discord, with "a number of participants express[ing] willingness to adjust the flow of purchases downward as early as the June meeting" if economic data are sufficiently strong by then. The lack of consensus wasn't a surprise, as the central bank's recent communications have included some more hawkish officials arguing for a quicker end to current policy, but it seemed to justify the reaction to Bernanke's lone quasi-hawkish statement earlier on.

"The Fed is trying to walk a tightrope, allowing people to continue with the false hope of quantitative easing lasting indefinitely without spooking people that they're going to end it too soon," said Tad Rivelle, chief fixed-income investment officer at TCW and manager of the $25 billion
MetWest Total Return
fund (ticker: MWTRX). "It's a nearly impossible task, but you have to give them credit for confronting the problem, although you could say it's a problem of their own making."

Rivelle says the three main so-called doves within the Fed—Bernanke, Dudley, and Vice Chair Janet Yellen (seen as a potential successor to Bernanke)—still "rule the roost" but that markets have grown so accustomed to quantitative easing and the notion that it will continue that even mild, balanced statements by the Fed are interpreted as moderately hawkish and disruptive.

With Fed policy seemingly poised to change more abruptly than people think, Rivelle warns that relatively small movements in the 10-year Treasury's yield can effectively wipe out a year's return: "The only reason people own low-yielding bonds is that they're better than cash, they're better than nothing, provided financial repression remains the policy of the day." The 10-year's yield rose again last week, ending at 2.012% on Friday, versus 1.952% a week earlier.

Looking across income markets now, Rivelle sees the best value in nonagency mortgage-backed securities, bank loans, and emerging-market corporates.